Have your cake and eat it too.

Live Like a College Student

To many recent college grads, the often repeated financial advice is to continue to live like a college student. It makes sense, since a recent college grad is generally used to living a more frugal life. If you continue to live without inflating your lifestyle, you’ll save a good amount of money. However, even back when I was in college, many college students weren’t living like college students. Many took extra student loans and used credit cards to buy nice clothes, go drinking, go on spring break vacations and even buy fancy expensive cars. Apparently, they figured that once they graduated and received a steady paycheck, they would easily be able to pay off that debt. Unfortunately, most realize that once in the real world, with living expenses and lifestyle inflation, the debt just accumulates.

So rather than advising new grads to continue to live like a college student, let’s just tell them to live frugally. Billionaire Mark Cuban recently gave that exact advice to those in their 20s. He told them to live cheaply, and to use their 20s to pay off student-loan debt, avoid credit-card debt, and build savings. He explains that the cheaper you can live, the greater options you will have, whether you are building your own business or building a foundation for a successful career. He says that paying off debt and establishing a nest egg is far more important than buying a fancy house, car, and clothes. This is great advice, and your future self will thank you for following it.

Going from being a college student to a full-time worker, some lifestyle inflation is inevitable and understandable. You’re probably making much more than you’ve made in your life, though probably working more hours also. Spending that money might be awfully tempting if you don’t have a plan and financial goals. So what expenses do many new grads get caught up in?

Housing: This is probably the biggest expense in most people’s budgets. Sure, you might feel like you’ve had enough of living with roommates, and want your own apartment, but it’s much more affordable when you split the rent. Going back home to live with mom and dad may be an option for some and shouldn’t be discounted. I think after the 2008 recession, the stigma of living home with the ‘rents has subsided, though I’m not sure there ever should have been such a stigma.

Car: If you live in a city that has reliable public transportation, there may not be a need to even purchase a car. If you have a car from college, don’t rush to upgrade. I was driving my car from college 8 years after I had graduated. I had a friend from college ask me incredulously why I was still driving my car from college when he saw me years after we graduated. That didn’t bother me, though, as the car still ran fine and I didn’t have any car payments to make. Having a fancy car just wasn’t as important as not having any monthly payments to make.

Food: Eating like a college student doesn’t mean you should continue to subsist on Ramen and TV dinners. As a matter of fact, if you haven’t learned to cook by now, it’s probably a great time to learn. If I can learn to cook, you most certainly can as well. Cooking at home is much more affordable and healthier as well. To save on groceries, read my post with tips on that. And for tips to save money when eating out, read this.

Entertainment: You’re in your 20s, who I am to cramp your style and tell you to live like a hermit. You’re young. Have fun and enjoy life! Just make sure not to go overboard. There are plenty of things that you can do that won’t wreck your budget. Honestly, my best memories from my 20s are experiences hanging out with friends and family. More often than not, it didn’t matter what we were doing. And also remember that “shopping” should not be a form of entertainment. By getting rid of the consumer mindset early in life, you’ll save yourself a lot of stress and money.

By not taking on debt and having a healthy savings rate, you give yourself options and set yourself up for a financially bright future. Money, or the lack of it is often a hindrance when making decisions or when facing obstacles that life tends to throw at you. Having no debt and a good amount of savings gives you choices. Taking risks in your career or in your personal life is much easier at this point in your life, but not having money will be a huge impediment. Have a great idea for a start-up and want to quit your job to fulfill this dream? Not happening without some savings. Stuck in a rut and suffering from wanderlust? You can’t travel the world if you’re broke.Hate your job and want to take a risk by jumping into a different career track? It’s a lot less risky if you have an emergency fund.

Post navigation

37 thoughts on “Live Like a College Student”

Nice post Andrew. Fortunately, my wife and I have pretty basic standards. While probably not actually college level, we certainly live well below our income. After graduating my mom let me move in for 6 months to build up my savings. The timing with the housing boom/bust was dubious, but I saved a nice emergency fund.

Cuban is right, but I am surprised such a party boy gave the advice. Hope you three are doing well. Take care buddy.
-BryanIncome Surfer recently posted…The Two Sides of Our Portfolio

Hey it’s okay not to live like a college student when you’re married and have a kid! We’re still frugal but not sure I’d want a roommate. I’ve read a few of Cuban’s thoughts and it really changed my opinion of him. I originally thought he was party boy who got lucky with some software company but he’s a very interesting read if you check out his blog.

There are days where I feel like I’m living like a college student still, and other times can feel the inflation just knocking me on my back. The biggest one was purchasing a car, however, it has helped me be more mobile and independent, which is a plus. Yet, I still enjoy watching the sunset outside and choose a book over going to the movies, so I guess some things are still the same.Amanda S @ Passionately Simple Life recently posted…May Expenses and the Start of a June Budget

It’s great when you have simple hobbies that you enjoy which doesn’t cost a lot. It’s okay to have some lifestyle inflation…it’s absolutely normal. But some people take it to the extreme which leads to financial trouble.

This totally make sense because as I’m discovering now having a roommate who is currently sleeping in my living room temporarily (thank god!), once you get used to a certain way of living it is very hard to downgrade later. I would say when I graduated I was yin/yang. I lived in a very cheap part of the country (michigan) and had roommates, and had hand me down furniture and whatnot, but I did spend a lot on concerts and CD’s.Tonya@Budget and the Beach recently posted…Money Talk!

Great advice for new graduates and living below your means is a great way to get rid of those annoying loans and work your way into creating a great financial future. I always love seeing articles like this now for a lot of people didn’t talk about this subject years ago.Petrish @ Debt Free Martini recently posted…It’s Called Personal Finance For A Reason

Thanks! I think the new grads nowadays are more cognizant of their spending because of the news of unemployment and the economy but it’s inevitable for new grads to feel the lure of spending when they get their steady paycheck.

We went straight for lifestyle inflation, but looking back, we would’ve definitely taken Mark’s advice. The reason he’s such a successful (and rich) businessman is because he knows what he’s talking about. Laurie @thefrugalfarmer recently posted…8 Frugal Home Hacks AND a Giveaway!

If more people lived beneath their means they would realize how straight forward it is to build net worth. At the end of the day a healthy savings rate and the power of compound returns is incredible. It boils down to discipline and diligence. Great post!Dane Hinson recently posted…IRA Investing: How We Diversify and Balance Our Portfolio

Live frugally is the best way of living IMO. I certainly continued living like a student for a few years after graduating from university. I really like Cuban, he is a smart man that knows what he’s talking about.Tawcan recently posted…Fighting for financial freedom

I got married within 10 months of graduating from college so I inevitably had to get more “living space” and leave my ultra-cheap rent at a house in the ghetto. I think houses are the biggest area where recent college grads can save money. I know many people who are around my age who bought the $400k+ house. While I think that can be affordable, I don’t think it’s necessarily the best place to park your cash. Buying a smaller home is a better choice long-term.DC @ Young Adult Money recently posted…5 Personal Finance Books on my “To Read” List

Yea, housing is always one of the biggest expense. I think it makes sense to buy a smaller home…especially when you’re young. It’s just the two of you! Although if it makes sense, buying a bigger house and renting portions of it out works too.

Yeah, renting a portion can be a big win long-term, especially with the right renters. We have a studio apartment setup in our basement and it’s been great so far.DC @ Young Adult Money recently posted…5 Personal Finance Books on my “To Read” List

Good advice and its too bad young 20 year olds don’t take older wiser people’s advice. They do as they please, and that is why the majority are playing catch up in their 30s. A post like this can help some of them make the right choices. Good luck.EL @ Moneywatch101 recently posted…Creative Ways to Save Dollars

Good advice, Andrew. One thing I’ve noticed when I talk to recent graduates (often at their parent’s request because hearing the exact same advice from someone you don’t call Mom and Dad makes it better. LOL!) is that they don’t have realistic expectations around their immediate salary potential and what it costs to live by themselves. So even though they are earning more than they likely have ever before, it’s not as much as many anticipated earning. It’s why I advocate parents to sit down with their college-age kids to review those costs regularly to help them prepare for reality.Shannon @ The Heavy Purse recently posted…Summer Vacation Planning and Saving Tips #Infographic

I am glad that I was like that college student, you defined previously. It had been so easy to stay frugal later on, but I admit that at the start when I had my first series of salary, I was kinda spender, buying clothes here and there. But, I am innately a saver, so that short habit stopped after some realization.Jayson @ Monster Piggy Bank recently posted…Looking Into Amazon Selling

Yea, I’m innately a saver too so I also lived frugally even when I started my first job. But, hey it’s natural to spend a little more when you have a consistent paycheck. It’s okay, but glad you realized that the lifestyle inflation was not worth it.

I wouldn’t say a college student, but definitely closer to a college student than many of my peers. I like to think I live like I did on about half the income that I make now when I first graduated college. Eating Easy Mac and turkey sandwiches nonstop wouldn’t suit me well now Fervent Finance recently posted…Asset Allocation – Part One

Mark Cuban, like all yinzers, is exceptionally bright and gives great advice.

For whatever reason, I think it’s tricky to actually take this advice in your 20’s, when it would be the most helpful. There’s something about actually making financial mistakes, that provides the proper motivation to actually take finances seriously.Done by Forty recently posted…Linear Assumptions are Bullshit

I wish I lived like a college student after I graduated! Unfortunately I got a great job with a great salary working in investment banking and immediately raised my lifestyle the second I graduated. Now I advise my clients to keep a healthy gap between their income and their lifestyle. It’s so tempting to increase lifestyle with increases in income but when you keep that gap, you give yourself a better shot financially.Shannon @ Financially Blonde recently posted…Music Mondays – One Step at a Time

I wish that we were living like college students, if we were we would have tons of extra cash each month. Now that we have a kid and a mortgage, it is amazing how much life costs.Deacon recently posted…24 Great Passive Income Ideas

We lived like we were poor at first…because we were. My husband’s first real job paid 20K! It wasn’t bad because we didn’t have many bills….but still.Holly@ClubThrifty recently posted…8 Credit Card Myths: Busted!